Gap insurance questions

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Gap insurance questions

When buying Gap Insurance, it is advisable to choose a policy that doesn’t apply an excess deduction’ or an ‘annual payout reduction’ this means the insurance providers are legally allowed to reduce their payout by a set amount each year of the policies life.

Things to watch for when choosing Gap Insurance

If gap insurance is purchased from a dealership at the same time as buying a car, ensure that in the terms and conditions it states that the payout will go directly to the motorist not to that same dealership, this is an arguably unfair method used by certain companies to ensure the replacement car is purchased from them.

Some Gap Insurance policies have certain situations under which they will not make a payout, this includes for example not paying out if a car is stolen after the keys were taken i.e. there is no physical break in to the car. These clauses should be read carefully and decided if cover is required if that scenario was to occur.

A gap Insurance policy will state whether it will make a payout for up to the Glasses Guide Retail Value, or up to a maximum of 110 percent of the Glasses Guide Retail Value.

It should be noted that manufacturer extras such as heated seats or satellite navigation would not be taken into consideration nor their costs covered if the policy only pays out the Glasses Guide Retail Value, it is possible to get these extras covered at no extra costs with a variety of policies.

In the same way insurance cover for extra car accessories like an upgraded sound system will not ordinarily be covered but could be included if asked for no extra costs.